Issue
Is the entity, a registered chiropractor, making a GST-free supply under subsection 38-10(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies nutrients to a patient during a consultation?
Decision
No, the entity is not making a GST-free supply under subsection 38-10(3) of the GST Act, when it supplies nutrients to the patient during a consultation. The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity, a registered chiropractor and a 'recognised professional' for the purposes of the GST Act, supplies chiropractic services that are GST-free under subsection 38-10(1) of the GST Act.
The entity supplies nutrients to a patient during a consultation. The patient acquires the nutrients for use as part of his/her on going treatment at home.
The nutrients are those that are generally used to support tissue repair and healing and do not fall within the scope of drugs and medicinal preparations under section 38-50 of the GST Act.
The nutrients and chiropractic services are supplied from the same premises.
The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.
Reasons For Decision
Subsection 38-10(3) of the GST Act provides that a supply of goods is GST-free if: • it is made to a person in the course of supplying to that person a service which is GST-free under subsection 38-10(1) of the GST Act; and • it is made at the premises at which the service is supplied.
From the facts, the entity supplies chiropractic services that are GST-free under subsection 38-10(1) of the GST Act. Furthermore, the nutrients are supplied from the same premises at which the GST-free chiropractic service is supplied. Therefore, the question at issue is whether the nutrients are supplied 'in the course of' supplying the GST-free chiropractic services.
It is considered that the phrase 'in the course of' in the context of subsection 38-10(3) of the GST Act requires the goods to be supplied at the same point in time at which the GST-free chiropractic services are supplied. In addition, the goods must be either: • customised or manipulated for the exclusive treatment of the illness or disability of the particular patient who is the recipient of the GST-free chiropractic service; or • necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.
As the nutrients are supplied at the same time the GST-free chiropractic services are supplied, the question at issue is whether they are customised or manipulated for the exclusive treatment of the illness of disability of the particular patient who is the recipient of the GST-free chiropractic service, or they are necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation.
In this case, the nutrients are not customised or manipulated for the exclusive treatment of the illness or disability of the particular patient, as they are not made specifically to treat the particular illness or disability of the particular patient. Furthermore, they are not necessarily utilised as an integral part of the patient's treatment required immediately during that specific consultation. The patient acquires the nutrients for use as part of his/her on going treatment at home.
As the supply is not made 'in the course of' the GST-free chiropractic session, the requirements under subsection 38-10(3) of the GST Act are not met. Therefore, the entity is not making a GST-free supply under subsection 38-10(3) of the GST Act when it supplies nutrients to a patient at the time of consultation.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, as the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.